Only one month and a bit after closing a Series A round, doctor-on-demand service Heal closed a Series B round to the tune of $14.8 million led by Fidelity Management and Research Company, according to a company news release.
Here’s why this is interesting.
Fidelity’s healthcare investments tend to be in life sciences and in mid to later stages — C rounds and higher. Last year, Fidelity Management and Research Company led 23andMe’s Series E round. There have been certain exceptions. Fidelity led Zenefits Series C round. Fidelity Investments Canada backed Thalmic Labs in a Series B round. In October, Fidelity Management and Research Company took part in a Series B round for anti-aging drug developer Unity Biotechnology. Fidelity also participated in a Series B round for Corvus Pharmaceuticals last year.
With Fidelity’s investment, Heal has raised $54.8M to date.
So I emailed Heal CEO Nick Desai to learn why he took on back to back investments. Here’s what he said.
“Heal was in the closing process of the Series A when Fidelity became interested in investing. Fidelity agreed to a higher valuation and as we were near closing the A, we just did the Fidelity investment as a Series B. This wasn’t a traditional Series B in that we didn’t solicit the new money, it came to us opportunistically and so we closed the B on November 7th.”
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Desai added that the company would use the additional proceeds to accelerate product development, scale the business and for new market launches.
It could be that in amidst such an uncertain investment landscape in the coming year, some startups are inclined to avoid delaying funding opportunities until next year.
Heal raised $26.9 million in a Series A round just one year following the official launch of the business. That funding is intended to support the expansion of the business beyond California, product development and to support collaboration opportunities with Medicare and Medicaid, CEO and Co-founder Nick Desai said in a phone interview.
Tull Investment Group, one of its original investors, led the Series A. Breyer Capital, Qualcomm Executive Chairman Paul Jacobs as well as Hashtag One, March Capital Partners, and Slow Ventures also took part in the round.
One startup consultant contact familiar with the raise had this to say in a text message:
“I don’t blame them for grabbing cash, but that’s a LOT of cash, and Series C metrics / investors are going to expect a lot from them downstream.”
Photo: Hong Li, Getty Images
